WASHINGTON, (Reuters) - The United States said Monday it
was "deeply disappointed and much concerned" by an $800
million agreement between Royal Dutch/Shell and the Iranian
National Oil Company to develop two Iranian oilfields.

But analysts said they doubted the Clinton administration
would break with precedent and impose sanctions on the
Anglo-Dutch giant under the Iran-Libya Sanctions Act (ILSA) of
1996, barring a sudden shock to Iranian-American relations.

State Department spokesman Philip Reeker said: "We are both
deeply disappointed and much concerned about the report. We
remain strongly opposed to investment in Iran's oil sector."

"We are going to look closely at the facts and assess the
implications under ILSA, then determine whether sanctionable
activity has actually taken place, and if it has, decide in the
light of our national interest, what action under the law to
take. Of course we can't prejudge any conclusions," he added.

"Nothing will happen for a long time," added another State
Department official, who asked not to be named.
The analysts said they expected the administration would
follow the precedent it set last year when it waived ILSA
sanctions against the France company Total SA , which had signed
a $2 billion gas exploration deal with Iran in 1997.

The Total decision made European firms less wary of
investing in Iran, which has since signed agreements with
several other foreign oil companies. France's Elf Aquitaine
(ELFP.PA) and Canada's Bow Valley Energy Ltd (BVX.TO) made a
$300 million deal to develop an offshore oil field.

"Clearly the precedent has been set (with Total), which
would lead one to believe that they would do the same in this
case," said Eric Thomas, spokesman for USA Engage, a coalition
of U.S. companies opposed to unilateral U.S. sanctions.

Shireen Hunter, an Iran expert at the Center for Strategic
and International Studies in Washington, said she thought ISLA
sanctions were improbable, other things being equal.

"If things go normally and if there aren't any nasty
surprises around the corner, most probably they (the U.S.
administration) will allow it to go through," she said.

Two events that could disrupt expectations would be harsh
sentences for the 13 Iranian Jews expected to face trial on
espionage charges and a finding that Iran had a direct role in
the bomb which killed 19 U.S. servicemen at Khobar in Saudi
Arabia in 1996, she added.
"If anything nasty happens on that front (the spy case),
everything that we have achieved so far would be lost and it
would take a long time to recover," she said.

Richard Bulliet, director of the Middle East Institute at
Columbia University in New York, said he agreed that ILSA
sanctions against Shell were unlikely.
"Everyone assumed that ILSA was no longer in effect, that
these restrictions remain only on U.S. companies, that its
application to foreign companies was in abeyance," he said.

ILSA and other sanctions against Iran are caught up in the
Washington's equivocal attitude towards the Iranian government.
It says it wants a dialogue but at the same time it advocates
policies that seek to isolate Iran's Islamic leaders.
Reeker argued that lifting sanctions would encourage Iranian
hard-liners, who would have obtained what they wanted without
changing their policies.

"We don't believe that investment and other economic
engagement is contributing to a positive exchange. In fact such
investment undermines the moderates and strengthens those who
assert that Iran can enjoy normal commercial interaction without
changing their objectionable policies," he said.

"Despite some positive development, we have yet to see
measurable improvements in the areas of greatest concern --
their pursuit of weapons of mass destruction and missile
delivery systems, support for terrorism and their violent
opposition to the Middle East peace process," he added.
The United States has offered to sit down with the Iranians
for unconditional talks on matters of concern. Iran says the
United States should take other steps first, such as unfreezing
some Iranian assets seized after the Iranian revolution.

TEHRAN, (Reuters) - An Iranian court sentenced a group of students to jail terms ranging from eight months to eight years for their role in pro-democracy unrest in the northwestern city of Tabriz last July, a newspaper reported on Sunday.

The Khordad daily did not say how many students had been convicted, but said the court had acquitted 14 others.

In September a revolutionary court sentenced 21 people to jail for their part in the riots that broke out in Tabriz in sympathy with similar demonstrations in Tehran that ran for six days and culminated in running street violence.

July's unrest, the worst in Iran since the aftermath of the 1979 Islamic revolution, was sparked when police and armed vigilantes raided a peaceful student demonstration against the banning of a reformist newspaper.
The attack led to a series of student demonstrations seeking the resignation of Iran's police chief and several other conservative officials.

Around 1,500 students were arrested in the aftermath of the demonstrations and ensuing riots in Tehran and Tabriz.

The Associated Press
CHICAGO-Iran's soccer team will play in the United States for the first time, facing the Americans in an exhibition game at the Rose Bowl on Jan. 16.

Iran upset the U.S. team 2-1 in June 1998, virtually eliminating the Americans from the World Cup. The United States wound up 0-3, last in the 32-nation field.

"When we were originally matched up against Iran in the World Cup, it garnered a lot of attention, most of which was centered around political tension," Hank Steinbrecher, the executive director of the U.S. Soccer Federation, said Thursday. "Those two teams showed their level of class before and even during that game. Now people can look at this game for what it actually represents, simply the spirit of competition."

The Americans, off since a 2-2 tie with Jamaica on Sept. 8, plays an exhibition game against Morocco at Marrakech on Nov. 17.

The Americans, 7-3-2 this year, already have scheduled a Jan. 29 exhibition game in Chile in a city to be determined.

The next big tournament for the United States is the CONCACAF Gold Cup, the championship of North and Central America and the Caribbean. The Americans have first-round games against Haiti on Feb. 12 and Peru on Feb. 16, both at Miami.

TEHRAN - XINHUA - Former Iranian President Hashemi Rafsanjani said on Friday the recent renewal of U.S. sanctions against Iran has once again disproved the U.S. goodwill overture to Iran.

Speaking at the Friday prayers congregation on the campus of Tehran University, Rafsanjani said the Islamic Republic of Iran will never succumb to those sanctions.
"The decision by Washington has again disproved the allegedly good intentions of the Americans in their dealings with Iran," the Islamic Republic News Agency quoted him as saying.
U.S. President Bill Clinton has recently renewed the economic sanctions imposed in 1979 on Iran following the takeover of the U.S. embassy in Tehran by Iranian students on the heydays of the Islamic revolution.

Clinton said the sanctions were renewed because the troubled relations between Washington and Tehran had not been "fully restored."
Rafsanjani, chairman of the powerful advisory State Expediency Council, said the behavior of the U.S. governments has been markedly against what they have preached.

The U.S. government intimated its willingness for talks with the Iranian government and showed good-will feelings in its international political propaganda, he said, but at exactly the same time Washington extended its sanctions against Tehran.

The Iranian former president accused the U.S. government of trying every device to lead the political situation in Iran to a different course and ruin the Iranian national unity and independence.
Over the past few months, several senior U.S. officials extended overtures to Iran for "unconditional dialog" to improve relations between the two countries which were severed in 1980.
However, Iranian officials repeat would be "meaningless."

Asefi said the move was a repetition of Washington's former policies which indicated the lack of initiative in its foreign policy toward Iran.
The spokesman said the sanctions have breached the international trend of free global trade and have already been proved inefficient in the past.
The sanctions have merely deprived American companies of presence in the Iranian markets and have been to their disadvantage, he added.

U.S. President Bill Clinton has recently renewed the economic sanctions imposed on Iran in 1979 following the takeover of the U.S. embassy in Tehran by radical students in the heydays of the Islamic revolution.

Clinton said the sanctions were renewed because the troubled relations between Washington and Tehran had not been "fully restored."

Over the past few months, several senior U.S. officials extended overtures to Iran for "unconditional dialog" to improve relations between the two countries, which were severed in 1980.

However, Iranian officials insisted that the U.S. must take positive steps to change its hostile policy towards Iran, otherwise any talks on relations would be "meaningless."

TEHRAN, (Reuters) - Iran would welcome mediation to help end two decades of hostility between Tehran and Washington, Iran's Foreign Minister Kamal Kharrazi was quoted as saying on Monday.

"It would be desirable if (third) countries can talk to the Americans and convince them to change their attitude" toward Iran, Kharrazi told the official IRNA news agency.
Iranian reformers have used last week's 20th anniversary of the Iranian hostage crisis to demand an end to hostility towards the United States, which some say has kept the nation and its economy isolated from the international community.

"It would be nice if a third country was interested to try and convey the realities...and do it in a timely manner," Kharrazi said, without elaborating.
It was the first time Tehran publically announced a desire for mediation to improve relations with Washington since they broke ties two decades ago after Iranian revolutionaries took hostage American embassy staff in Tehran.

Iran has repeatedly rebuffed U.S. offers for direct talks to resolve their differences, demanding practical steps from Washington, such as the removal of economic sanctions imposed on the Islamic republic.
"There is no talk of mediation, because In the first place the two countries should have the political will before there can be talk of mediation," Kharrazi said.

"Our relations are made up of a long list of complaints. Naturally, ties will not improve until this atmosphere is changed and a serious move is taken," Kharrazi said.
The minister recalled that Washington had "once before changed its attitude" toward Iran when it took it off a list of countries supporting drug trafficking.

The Associated Press
DUBAI, United Arab Emirates  The Iranian parliament approved a bill Tuesday that allows Iranians to file lawsuits against foreign governments  including the United States  the Islamic Republic News Agency reported.

"All Iranian nationals who have suffered from the treacherous interference of America can file lawsuits against it," Parliament deputy speaker Hassan Rowhani was quoted by IRNA as saying after the bill was approved.

The bill also allows the Iranian judiciary to review lawsuits filed against foreign governments.

According to reports, the law would allow Iranians to sue foreign countries for any violation of international law, "such as interference in domestic affairs" that results in death, injury or financial loss.

The Associated Press
TEHRAN, Iran -Iran cannot trust American efforts to improve two decades of troubled ties because of conflicting signals from the U.S. government, a report published Sunday quoted the Iranian foreign minister as saying.

The Abrar daily newspaper quoted Kamal Kharrazi as saying some U.S. officials have used a "more moderate tone" in urging better relations, while others have repeated the "same old attitudes" about Iran.

Such mixed signals indicate an absence of "unified national will" within the U.S. administration or between the administration and Congress, Kharrazi said, according to the Farsi-language newspaper.

"As long as such a national will does not come to shape and no effective, practical step is taken to remove hurdles, we cannot have trust in what some American officials say," Kharrazi said.

Last month, Assistant Secretary of State Martin Indyk renewed an offer for direct, unconditional talks aimed at improving ties with the Iranian government. Twenty-eight U.S. senators quickly urged Indyk's boss, Madeleine Albright, not to associate with an Iranian leadership they described as "repressive and brutal."

Washington severed diplomatic ties with Iran after militants stormed the U.S. Embassy in Tehran in 1979 and took 52 Americans hostage for 444 days. Iranians marked the 20th anniversary of the embassy takeover last week with the usual burning of Uncle Sam effigies, but also with calls for better relations. Iranian moderates, led by President Mohammad Khatami, seek better relations with Washington.